Question

Using High-Low to Calculate Fixed Cost, Calculate the Variable Rate, and Construct a Cost Function Pizza...

Using High-Low to Calculate Fixed Cost, Calculate the Variable Rate, and Construct a Cost Function

Pizza Vesuvio makes specialty pizzas. Data for the past 8 months were collected:

Month Labor Cost($) Employee Hours
January 9,790 290
February 7,300 330
March 7,831 350
April 8,440 260
May 10,087 310
June 8,790 240
July 11,040 400
August 7,800 220

Pizza Vesuvio's controller wants to calculate the fixed and variable costs associated with labor used in the restaurant.

In your calculations, round the variable rate per employee hour to the nearest cent. If required, round your final answers to the nearest cent.

Required:

1. Using the high-low method, calculate the fixed cost of labor.
$fill in the blank 1

2. Using the high-low method, calculate the variable rate.
$fill in the blank 2 per employee hour

3. Using the high-low method, construct the cost formula for total labor cost.

Total labor cost = $fill in the blank 3 + ($fill in the blank 4 × Employee hours)

Homework Answers

Answer #1

1.

Fixed cost = Highest activity cost - Highest activity x Variable cost per hour

= 11,040- 400 x 18

= 11,040-7,200

= $3,840

2.

Highest activity cost = $11,040

Lowest activity cost = $7,800

Highest activity = 400

Lowest activity = 220

Variable cost per hour= (Highest activity cost - Lowest activity cost)/(Highest activity - Lowest activity)

= (11,040-7,800)/(400-220)

= 3,240/180

= $18 per hour

3.

Total labor cost = $3,840 + (18 x Employee hours)

Kindly comment if you need further assistance.

Thanks‼!

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Using High-Low to Calculate Fixed Cost, Calculate the Variable Rate, and Construct a Cost Function Pizza...
Using High-Low to Calculate Fixed Cost, Calculate the Variable Rate, and Construct a Cost Function Pizza Vesuvio makes specialty pizzas. Data for the past 8 months were collected: Month Labor Cost($) Employee Hours January 9,290 350 February 6,800 410 March 7,331 430 April 7,940 320 May 9,587 380 June 8,290 300 July 10,732 490 August 7,300 270 Pizza Vesuvio's controller wants to calculate the fixed and variable costs associated with labor used in the restaurant. In your calculations, round the...
Using High-Low to Calculate Fixed Cost, Calculate the Variable Rate, and construct a cost function Pizza...
Using High-Low to Calculate Fixed Cost, Calculate the Variable Rate, and construct a cost function Pizza Vesuvio makes specialty pizzas. Data for the past 8 months were collected: Month Labor Cost Employee Hours January 9,590 490 February 7,100 570 March 7,631 610 April 8,240 460 May 9,887 530 June 8,590 420 July 12,460 680 August 7,600 380 Pizza Vesuvio's controller wants to calculate the fixed and variable costs associated with labor used in the restaurant. In your calculations, round the...
Using High-Low to Calculate Predicted Total Variable Cost and Total Cost for a Time Period that...
Using High-Low to Calculate Predicted Total Variable Cost and Total Cost for a Time Period that Differs from the Data Period Pizza Vesuvio makes specialty pizzas. Data for the past 8 months were collected: Month Labor Cost Employee Hours January $7,100 340 February 9,999 530 March 8,240 610 April 9,887 590 May 8,590 460 June 7,631 330 July 9,590 550 August 7,550 290 Assume that this information was used to construct the following formula for monthly labor cost. Total Labor...
Using High-Low to Calculate Predicted Total Variable Cost and Total Cost for Budgeted Output Pizza Vesuvio...
Using High-Low to Calculate Predicted Total Variable Cost and Total Cost for Budgeted Output Pizza Vesuvio makes specialty pizzas. Data for the past eight months were collected: Month Labor Cost Employee Hours January $7,000   360 February 8,140 550 March 9,899 630 April 9,787 610 May 8,490 480 June 7,450 350 July 9,490 570 August 7,531 310 Assume that this information was used to construct the following formula for monthly labor cost. Total Labor Cost = $5,237 + ($7.40 x Employee...
Using Regression to Calculate Fixed Cost, Calculate the Variable Rate, Construct a Cost Formula, and Determine...
Using Regression to Calculate Fixed Cost, Calculate the Variable Rate, Construct a Cost Formula, and Determine Budgeted Cost Speedy Pete’s is a small start-up company that delivers high-end coffee drinks to large metropolitan office buildings via a cutting-edge motorized coffee cart to compete with other premium coffee shops. Data for the past 8 months were collected as follows: Month Delivery Cost Number of Deliveries May $63,450 1,800 June 67,120 2,010 July 66,990 2,175 August 68,020 2,200 September 73,400 2,550 October...
Flexible Overhead Budget Wiki Wiki Company has determined that the variable overhead rate is $3.8 per...
Flexible Overhead Budget Wiki Wiki Company has determined that the variable overhead rate is $3.8 per direct labor hour in the Fabrication Department. The normal production capacity for the Fabrication Department is 9,000 hours for the month. Fixed costs are budgeted at $47,700 for the month. a. Prepare a monthly factory overhead flexible budget for 8,000, 9,000, and 10,000 hours of production. Enter all amounts as positive numbers. Wiki Wiki Company Monthly Factory Overhead Cost Budget-Fabrication Department Direct labor hours...
High-Low Method Liberty Inc. has decided to use the high-low method to estimate costs. The data...
High-Low Method Liberty Inc. has decided to use the high-low method to estimate costs. The data for various levels of production are as follows: Units Produced Total Costs 100,000   $1,800,000 180,000   2,800,000 300,000   4,300,000 a. Determine the variable cost per unit and the fixed cost. Round variable cost per unit to the nearest cent. Variable cost per unit $__________ Fixed cost $__________ b. Based on part (a), estimate the total cost for 260,000 units of production. $___________
In the Bonita, maintenance costs are a mixed cost. At the low level of activity (100...
In the Bonita, maintenance costs are a mixed cost. At the low level of activity (100 direct labor hours), maintenance costs are $1200. At the high level of activity (400 direct labor hours), maintenance costs are $2200. Using the high-low method, what is the variable maintenance cost per unit and the total fixed maintenance cost? Variable Cost Per Unit Total Fixed Cost $3.33          $1000 $3.33          $868 $5.50          $275 $5.50          $2600
High-Low Method Ziegler Inc. has decided to use the high-low method to estimate the total cost...
High-Low Method Ziegler Inc. has decided to use the high-low method to estimate the total cost and the fixed and variable cost components of the total cost. The data for various levels of production are as follows: Units Produced Total Costs 1,400 $230,400 2,210 294,400 3,400 358,400 a. Determine the variable cost per unit and the total fixed cost. Variable cost: (Round to the nearest dollar.) $ per unit Total fixed cost: $ b. Based on part (a), estimate the...
High-Low Method Ziegler Inc. has decided to use the high-low method to estimate the total cost...
High-Low Method Ziegler Inc. has decided to use the high-low method to estimate the total cost and the fixed and variable cost components of the total cost. The data for various levels of production are as follows: Units Produced Total Costs 2,240 $98,000 840 63,000 1,450 90,160 a. Determine the variable cost per unit and the total fixed cost. Variable cost: (Round to the nearest dollar.) $ per unit Total fixed cost: $ b. Based on part (a), estimate the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT
Active Questions
  • Emerald Co. uses a perpetual inventory system and records purchases of merchandise at net cost. The...
    asked 40 minutes ago
  • Movie stars and U.S. presidents have fished Pyramid Lake. It is one of the best places...
    asked 1 hour ago
  • what advantages do percent distributions have over frequency distributions when comparing populations at different years?
    asked 1 hour ago
  • Richard has just been given a 6-question multiple-choice quiz in his history class. Each question has...
    asked 1 hour ago
  • Write about westernized elements in life; westernization in our life, and this includes Americanization.
    asked 2 hours ago
  • The college Physical Education Department offered an Advanced First Aid course last summer. The scores on...
    asked 2 hours ago
  • Researchers hypothesized that increasing a woman's level of arousal would increase her perceptions of attractiveness of...
    asked 3 hours ago
  • Equation 37-14b in the textbook gives the energy emitted by Hydrogen when electrons transition between states...
    asked 3 hours ago
  • Theory of Computation Please provide explanation too on how it works a. Give an NFA recognizing...
    asked 3 hours ago
  • Question 1 A sequential pattern detection circuit (state machine) has input A and output Y, which...
    asked 3 hours ago
  • Natural Foods Inc. is planning to invest in new manufacturing equipment to make a new garden...
    asked 3 hours ago
  • Explain why a callable bond's price would be expected to decline less than an otherwise comparable...
    asked 3 hours ago